Jet Airways and Etihad Airways

Jet Airways, India’s premier international airline, and Etihad Airways, the national airline of the United Arab Emirates, have outlined plans to reinforce their long-term commitment to the growth of India’s economy and aviation industry, including a major new turnaround strategy for Jet Airways to return to profitability in three years.

The
two airlines have been codeshare partners since 2008 and their relationship was
strengthened in November 2013, after Etihad Airways received approvals to
acquire a 24 per cent stake in Jet Airways, marking it the first investment by
a foreign carrier in India’s airline industry.

The
wide-ranging partnership has numerous advantages for travellers, including
enhanced connections across the world through an expanded codeshare agreement,
and reciprocal ‘earn and burn’ rights and tier level recognition on the
JetPrivilege and Etihad Guest frequent flyer programs.

Jet
Airways and Etihad Airways also stand to benefit from cost savings and
synergies in areas such as fleet acquisition, maintenance, product development
and training, and continue to explore collaborative purchasing opportunities
for fuel, spare parts, insurance and technology support.

Supporting
the partnership, the Jet Airways Board recently approved a three-year business
plan to reshape the airline and secure its long-term future. The plan
incorporates a series of critical measures that lay the foundations for a
return to profitability, such as long-term network, fleet and product
developments to optimise the airline’s domestic and international operations.

Focus
areas for international operations will include network developments, including
new services to markets such as Europe, China, Australia and Southeast Asia,
expanded frequencies to existing routes and additional codeshares. Jet Airways’
two and three class aircraft product will also be enhanced and the seat count
optimised on wide-body Boeing 777 and Airbus A330 aircraft.

In
addition, the domestic business model will improve connectivity across India and
worldwide, while removing complexity in product and fleet, including the
standardisation and reconfiguration of the Boeing 737 fleet.

To
initiate the three-year turnaround plan, the Jet Airways Board and management
team have already worked with auditors to clean up its balance sheet and write
down overvalued non-cash assets.

Jet
Airways has announced a new team at the helm with Cramer Ball as its new Chief
Executive Officer and Subodh Karnik as the Chief Operating Officer pending
regulatory approval. Mr Ball 46, an
Australian national, is a certified accountant and an accomplished airline
executive with extensive experience in the aviation industry. Mr. Karnik brings
with him rich experience in the aviation sector leading and assisting airlines
in fleet and network planning, global alliances, joint ventures and improving
overall efficiencies at international airlines.

Naresh
Goyal, Chairman of Jet Airways, said: “The coming together of Jet Airways and
Etihad Airways has already proved a success for the two airlines and,
importantly, has been beneficial for travellers, and will also bring
significant benefits to the Indian economy, both in terms of growth, job creation, trade and tourism. However, the
market has been challenged by factors such as a difficult economic climate,
volatile fuel prices, and the rapid growth of low-cost carriers in India. Tough
measures were needed to ensure Jet Airways’ long-term future, maximise its
partnership with Etihad Airways, and enhance the benefits this partnership offers
to passengers.

“Jet
Airways is renowned for introducing quality to India’s airline industry and its
time to re-energise and re-establish ourselves as the country’s leading
full-service airline. Our international operations are already profitable and contribute
45 per cent to our total revenue. We will continue to build on this strong
foundation as part of our three-year turnaround plan and increase the
contribution to 63 per cent by 2015. At the same time, we will address
challenges in the domestic market with a model that removes complexity in our
fleet, product and brand. This is not a short-term strategy, but we are
optimistic about the future and confident about achieving the intended
results.”

James
Hogan, President and Chief Executive Officer of Etihad Airways, said: “India
represents a considerable opportunity for airlines worldwide, with more than 42
million international travellers reported last year and impressive future
growth rates predicted by IATA. The challenge is ensuring that our industry is
efficiently catering to rising demand, not only in India’s major destinations,
but also smaller cities that remain largely unconnected and underserved.

“The
Etihad Airways and Jet Airways partnership has significantly improved
connectivity between India and the UAE, and through our combined network and
codeshare partnerships with other airlines, the Indian public has convenient
access to destinations across the Gulf region, Middle East, Africa, Europe and
North America. We are also bringing more travellers from these destinations to
India, supporting the country’s aviation industry and economy.”

Etihad
Airways, which celebrates the 10th anniversary of its inaugural flight to India
this September, currently operates 112 flights per week to 10 Indian destinations.
During the first half of 2014, more than 621,000 people travelled on the
airline’s India services, representing an impressive growth rate of 51 per cent
in comparison to the same period last year.

Last
month, the airlines announced a significant expansion of their codeshare
agreement, after obtaining regulatory approval to codeshare on 43 additional
routes, bringing the total number of services in their codeshare agreement to
71.

Under
the development, Etihad Airways placed its ‘EY’ code on domestic services in
India for the first time, with the codeshare agreement now including 31 Jet
Airways routes from hubs in Mumbai, Delhi, Chennai and Bangalore to regional
centres in Ahmedabad, Amritsar, Goa, Hyderabad, Jaipur, Kochi, Kolkata,
Lucknow, Mangalore, Patna, Thiruvananthapuram and Vadodara.

Also
included are Jet Airways flights between Abu Dhabi and Bangalore, Chennai,
Cochin, Delhi, Mumbai and Hyderabad, and Etihad Airways flights between Abu
Dhabi and Ahmedabad, Bangalore, Chennai, Hyderabad, Kochi, Kozhikode, Mumbai,
New Delhi and Trivandrum.

The
two airlines will commence a new marketing campaign tomorrow, with the tag line
‘Flying India Forward’, which highlights their collaborative offering for
Indian travellers. Together, Jet Airways and Etihad Airways operate more
international flights from India than any other airline, and provide
unrestricted opportunities to earn and redeem miles on their integrated
frequent flyer programs. The campaign will feature in newspapers, magazines,
radio, online, and also airport displays in India.